FX Update: USD-JPY dove only briefly on news of missile test
FX Update: USD-JPY dove only briefly on news of missile test by North Korea, which was again the Japan vaulting kind, similar to the missile test of a couple weeks back. The pair logged a 109.55 low after dropping about 70 pips amid a bout of safe haven positioning, though subsequently more than recovered, to around 110.60. Stocks in Asia saw a similar dip-then-recover action, with markets evidently shrugging off the latest missile launch, despite U.S. Secretary of State Tillerson calling on Russia and China to take "direct action" on North Korea. The historical norm has been for markets to quickly recover poise following Pyongyang's sabre rattling antics, though the stakes are higher than before as the rogue nation advances rapidly toward credible nuclear ICBM capability, asking the question of whether the big powers will allow this to happen. Outside the case of USD-JPY, the dollar has generally seen a consolidative mood against most currencies. EUR-USD has plied a narrow range in the low 1.19s. Sterling remain perky following the BoE's unexpected hawkish turn yesterday, with the pair logging a new one-year high at 1.3415.